Lithuania mulls ending agreements with major tobacco producers

Lithuania's government is considering whether to back the European Parliament's call to end agreements with major tobacco producers, under which the latter pay compensation to EU members for the producers' contraband products seized in these countries, informed LETA/BNS.

The Ministry of Finance proposed against backing the
decision to end such contracts. The Lithuanian government will consider the
move on Wednesday.

In 2004-2010, the European Commission signed four agreements
with major tobacco producers, which are in fact out-of-court settlements
related to the then ongoing judicial proceedings in the US where lawsuits were
filed against the tobacco companies over damages for indirect promotion of
trade in illegal cigarettes.

The agreement with Philip Morris ended in 2017, and the
European Parliament was against its extension and recommended ending all such
agreements with tobacco producers in 2019, which needs backing from all EU
member states. Therefore, the European Commission has asked member states to
provide express their positions.

In Lithuania, the Ministry of Health, the Drug, Tobacco and
Alcohol Control Department, as well as the National Tobacco and Alcohol Control
Coalition are in favor of ending such agreements but the Ministries of Finance
and the Interior, the Police Department, the State Border Guard Service, the
Financial Crime Investigation Service and the Customs Department are against.

The Finance Ministry underlines that the agreements are not
about cooperation with tobacco producers but about compensation for indirect
promotion of contraband. It says tobacco producers allocated 6.2 mln euros
in 2016-2019 and the money is used to for official incentives and the purchase
of equipment.

The EU agreement with Japan Tobacco Imperial is in force
until 2022, and the ones with British American Tobaco and Imperial Brands will
expire in 2030.

EU economy’s future: slow but positive growthGrowth in all EU states will continue in 2019-20, though at a slower pace than before. The largest EU’s economies will grow at around 1,5-1,7%, mostly in Poland, Spain and Holland. The Baltic States’ growth will continue to be on the positive trend.